Strong growth in its new wireless business and the announcement of a share repurchase program pushed shares of Quebecor Inc. higher on Wednesday after a challenging year for the stock so far.

The Montreal-based company reported lower profits in the second quarter, year over year, but its earnings beat expectations. Quebecor executives said the heavy investments in building its new wireless network were largely completed, and that the wireless business made up for declines in its cable business.

The company, which provides cable television, Internet and mobile phone services through its Vidéotron business, as well as media assets including magazines, newspapers, and television networks, reported revenue of $1.05-billion in the three months ended June 30, up roughly 6 per cent compared with the same period one year ago.

Its net earnings fell to $146-million, or 86 cents per share, compared with $173.6-million, or 95 cents, last year.

Quebecor added 45,900 subscribers to the wireless business that it launched last September. It now has a total of more than 200,000 mobile phone customers. Compared with results from large wireless incumbent and competitor BCE Inc., which added just over 94,000 customers across Canada in the quarter, Quebecor’s level of growth – drawing customers from Quebec only – was very strong, Desjardins Securities analyst Maher Yaghi said.

“While it’s pressuring EBITDA [earnings before interest, taxes, depreciation and amortization]margins a bit more than what we had expected … it bodes well for the next few quarters because now they’re going to start getting the contribution of those wireless net additions rolling into next year,” Mr. Yaghi said. “I don’t see any reason why they would not be able to reach a sustainable market share of 20 or 25 per cent over the long term.”

Quebecor’s wireless business allows it to compete with other large players who use bundling services to attract and keep customers. Its well-established Vidéotron customer base in cable television and Internet services allows Quebecor to compete with larger players using bundling discounts.

In the past we have been criticized for return to shareholders being lower than our peers, and we certainly admitted that. But we were in the midst of a huge investment cycle, and we had to be careful and prudent,” chief financial officer Jean-François Pruneau told analysts on a conference call Wednesday. “Now, obviously the investments, or most of the investments, are behind us. Our liquidity position is healthy. Our balance sheet is healthy as well, and we thought that it had made a lot of sense to get that [buyback]in place.”

The typical normal-course issuer bid is an offer for 2 to 5 per cent of a company’s outstanding common shares, Macquarie analyst Greg MacDonald pointed out that Quebecor has offered to buy back as much as 10 per cent of its shares, representing a meaningful investment by management in the company’s stock.

“I think it’s a fantastic move,” Mr. MacDonald said. “The major challenge that this stock – relative to other telco stocks – faces is that there isn’t a material dividend and it’s not very liquid. … As a result of that the stock’s been very weak. … The [buyback]is designed to support the stock in what is a pretty challenging market right now.”

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Lift wireless content restrictions: Péladeau

Quebecor Inc. chief executive officer Pierre-Karl Péladeau took a jab at the broadcast regulator on Wednesday, suggesting that restrictions on exclusive TV content on mobile phones should be lifted.

Wireless providers are currently barred temporarily from doing exclusive-content deals for their mobile devices, while the Canadian Radio-television and Telecommunications Commission considers how, and whether, to regulate TV content on new platforms.

“We know very well that providing significant amount of content, some of [it]being exclusive, will position our wireless service with [a]strong differentiating factor … so we look forward to continuing in this direction,” Mr. Péladeau said on a conference call to discuss the company’s earnings.

Quebecor must wait, however, until the CRTC lifts its moratorium on exclusivity and decides how it will approach a new industry.

At a CRTC hearing in June, Mr. Péladeau said wireless companies need exclusivity to compete. “If not, it’s going to be plain vanilla everywhere and only the large companies like Bell will succeed.”

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